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Billing mechanics

Entitlement

What a customer is allowed to use because of the plan they are on: which features, and up to what limits.

An entitlement connects a plan to what the product actually permits. It answers two questions: does this customer have access to this feature, and how much of it.

Entitlements need to be enforced from one place. When the billing system says a plan includes 100,000 API calls and the application enforces a limit hard-coded somewhere else, the two drift, and the direction of the drift is always expensive: either you are giving away what you sell, or you are cutting off a customer who paid.

Enforcement mode is part of the entitlement, not an afterthought: block, throttle, charge overage, or allow and notify. It is distinct from a feature flag, which controls rollout rather than commercial rights.

Related terms

  • Overage Usage beyond an included allowance or commitment, charged at a separate rate.
  • Meter The definition of what is measured and how it aggregates: which events count, over what period, summed or maximum or counted.
  • Seat-based pricing Charging per user or per licence, the most common model in B2B software.
  • Feature flag vs entitlement A flag controls whether code is switched on. An entitlement controls whether a customer has bought it. Conflating them causes revenue leakage.